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Diving SPACs Are a Warning for Aerospace Startups



For speculative aerospace startups, taking off gets harder when market winds suddenly turn against you.

Last year consolidated special-purpose acquisition companies, or SPACs, as the preferred way to list firms that make no money but promise cosmic returns. Aerospace has fully embraced them, starting with British billionaire

Richard Branson’s

space-tourism venture,

Virgin Galactic,

in 2019 and then through a raft of small-satellite launchers—such as

Rocket Lab


Astra Space

—and makers of electric vertical-takeoff-and-landing vehicles, or eVTOL—like

Joby Aviation,

Archer Aviation,

Vertical Aerospace

and Lilium Air Mobility.

On Friday, Mr. Branson virtually attended the opening bell for the Nasdaq debut of his other space venture,

Virgin Orbit,

which was rung by Chief Executive

Dan Hart.

The shares closed up a whopping 24%, but are still down 12% since its SPAC merger was completed on Dec. 30.

Indeed, almost all recently SPAC-ed aerospace startups have taken a beating over the past three months, with shares in Virgin Galactic down 46% and those in Archer and Joby losing 43% and 31%, respectively.

More broadly, the market value of these futuristic moonshots has ebbed and flowed in lockstep with cryptocurrencies and “meme stocks,” launching them toward the moon in the first half of 2021 and later deflating them. As the year came to a close, investors became more discerning: They bought the shares of SPACs that had fallen close to or below their trust values, which almost ensures a return, while retaining a skeptical view of ex-SPAC ventures.

It should be a warning for upcoming aerospace startups with galactic valuations. The latest is Eve, the eVTOL subsidiary of Brazilian plane maker


which two weeks ago announced a SPAC deal that would give it a valuation of $2.9 billion—Embraer’s own market capitalization is only $3.1 billion. To be sure, Eve already has $5 billion in preorders, but it will be fighting with myriad competitors for a market that is closer to science fiction than to the $1 trillion potential size dreamed of by some analysts.

By contrast, small-satellite launchers are already a promising entry point into the burgeoning space economy. Rocket Lab remains richly valued but has taken the lead among them and stands out as the rare ex-SPAC with more conservative official projections than those of its analysts. On the other end of the spectrum, Virgin Orbit’s valuation is now the cheapest among high-profile aerospace startups relative to expected 2026 earnings and has likely fallen below that of Astra, which struggled with many failed launches last year.

Despite Friday’s rally, Virgin Orbit still looks unfairly maligned compared with its sibling Virgin Galactic, which isn’t expected by Wall Street to generate any operating income in the next five years: It is seen coming close to break-even next year and making a sizable profit in 2024. It has already delivered 19 satellites into orbit, and its clever use of a


747 jet as a mobile rocket platform provides any government with geopolitical concerns the ability to deploy satellites from its own airspace.

However, despite expecting to raise $383 million from its SPAC backers in August, it only managed to hold on to $68 million. Together with some extra funds by Mr. Branson and already committed private placements by big corporations like Boeing, the final gross proceeds added up to $228 million—barely above the minimum cash requirements of the merger agreement.

The fact that ex-SPAC aerospace stocks indiscriminately trade in tandem can provide daring investors with opportunities. But it is also a reminder of the big role that fickle sentiment will play in the fate of these speculative enterprises.

Write to Jon Sindreu at

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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Teladoc Tumbled 38% After Big First-Quarter Loss. Is It Just a Pandemic Play?



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After pandemic drop, Canada’s detention of immigrants rises again By Reuters



© Reuters. FILE PHOTO: Two closed Canadian border checkpoints are seen after it was announced that the border would close to “non-essential traffic” to combat the spread of novel coronavirus disease (COVID-19) at the U.S.-Canada border crossing at the Thousand Isla

By Anna Mehler Paperny

TORONTO (Reuters) – Canada is locking up more people in immigration detention without charge after the numbers fell during the pandemic, government data obtained by Reuters shows.

Authorities cite an overall rise in foreign travelers amid easing restrictions but lawyers say their detained clients came to Canada years ago.

Canada held 206 people in immigration detention as of March 1, 2022 – a 28% increase compared with March 1 of the previous year. Immigration detainees have not been charged with crimes in Canada and 68% of detainees as of March 1 were locked up because Canada Border Services Agency (CBSA) fears they are “unlikely to appear” at an immigration hearing, according to the data.

The rise puts Canada at odds with Amnesty International and other human rights groups that have urged Ottawa to end its use of indefinite immigration detention, noting CBSA has used factors such as a person’s mental illness as reason to detain them.

A CBSA spokesperson told Reuters that “when the number of entries (to Canada) goes up, an increase in detention is to be expected.” CBSA has said in the past it uses detention as a last resort.

A lawyer told Reuters her detained clients have been in Canada for years.

In the United Kingdom, too, immigration detention levels rose last year after dropping earlier in the pandemic, according to government statistics. Unlike Canada, the United States and Australia, European Union member states have limits on immigration detention and those limits cannot exceed six months.

The rise in detentions puts people at risk of contracting COVID-19 in harsh congregate settings, refugee lawyers say.

Julia Sande, Human Rights Law and Policy Campaigner with Amnesty, called the increase in detentions “disappointing but not surprising,” although she was reluctant to draw conclusions from limited data.

The number of immigration detainees in Canada dropped early in the pandemic, from a daily average of 301 in the fourth quarter (January through March) of 2019-20 to 126 in the first quarter (April through June) of 2020-21.


Detaining fewer people did not result in a significant increase in no-shows at immigration hearings – the most common reason for detention, according to Immigration and Refugee Board data.

The average number of no-shows as a percentage of admissibility hearings was about 5.5% in 2021, according to that data, compared to about 5.9% in 2019.

No-shows rose as high as 16% in October 2020, but a spokesperson for the Immigration and Refugee Board said this was due to people not receiving notifications when their hearings resumed after a pause in the pandemic.

Refugee lawyer Andrew Brouwer said the decline in detention earlier in the pandemic shows Canada does not need to lock up as many non-citizens.

“We didn’t see a bunch of no-shows. We didn’t see the sky fall … It for sure shows that the system can operate without throwing people in jail,” Brouwer said.

He added that detainees face harsh pandemic conditions in provincial jails – including extended lockdowns, sometimes with three people in a cell for 23 hours a day.

Refugee lawyer Swathi Sekhar said CBSA officials and the Immigration and Refugee Board members reviewing detentions took the risk of COVID-19 into account when deciding whether someone should be detained earlier in the pandemic but are doing so less now.

“Their position is that COVID is not a factor that should weigh in favor of release,” she said.

“We also see very, very perverse findings … [decision-makers] outright saying that individuals are going to be safer in jail.”

The Immigration and Refugee Board did not immediately respond to a Reuters request for comment.

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Nasdaq futures rise as market attempts comeback from April sell-off, Meta shares soar



Stock futures rose in overnight trading as the market shook off the April sell-off and investors reacted positively to earnings from Meta Platforms.

Futures on the Dow Jones Industrial Average added 70 points or 0.2%. S&P 500 futures gained 0.7% and Nasdaq 100 futures jumped 1.2%.

The moves came as shares of Meta surged more than 18% after hours following a beat on earnings but a miss on revenue, a sign that investors may see signs of relief in the beaten-up tech sector. Shares were down 48% on the year heading into the results.

Meanwhile, shares of Qualcomm gained 5.6% in extended trading on the back of strong earnings while PayPal rose 5% despite issuing weak guidance for the second quarter.

“I think a lot of people want to believe that earnings are going to pull us out of this, but earnings are not what got us into this,” SoFi’s Liz Young told CNBC’s “Closing Bell: Overtime” on Wednesday. “… But the reality is there are so many macro headwinds still in front of us in the next 60 days that the market is just hard to impress.”

The after-hour activity followed a volatile regular trading session that saw the Nasdaq Composite stoop to its lowest level in 2022, as stocks looked to bounce back from a tech-led April sell-off. The index is down more than 12% since the start of April.

In Wednesday’s regular trading, the tech-heavy Nasdaq ended at 12,488.93, after rising to 1.7% at session highs. The Dow Jones Industrial Average rose 61.75 points, or 0.2%, to 33,301.93 propped up by gains from Visa and Microsoft, while the S&P 500 added 0.2% to 4,183.96.

Investors await big tech earnings on Thursday from Apple, Amazon and Twitter, along with results from Robinhood. Jobless claims are also due out Thursday.

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